FACTS FOR INVESTORS.

Auckland Star, Volume LXVII, Issue 151, 27 June 1936, Page 4

FACTS FOR INVESTORS.

FARMERS' FERTILISER CO. INCREASE IN PROFITS. DIVIDEND 5% PER CENT. Another successful -year's trading is reported by the directors of the New Zealand Farmers' Fertiliser Company. For the year ended May 31 both gross and net profits show an increase and a dividend at the unchanged rate of 5% per cent is recommended. The net profit for the year was £19,374. To this is added last year's balance, £21,569, giving a total of £40,943. Four thousand pounds has been added to the reserve fund, leaving the balance available for appropriation £36,943. The dividend will absorb £14,410, leaving £22,533 to be carried forward. The report states that during the year further additions were made to buildings, plant and machinery. Depreciation has been written off on the full scale. Stocks are ample to meet seasonal requirements. The retiring directors, Messrs. A. A. Ross and S. I. Crookes, are nominated for re-election at the annual meeting 011 July 30. Past Years Compared. Details taken from the accounts, together with the figures for previous years, are as follow: — Gross Net ■ profit. profit. Div. Reserves. Year. £ £ p.c. £ 1927 ... 55.740 25.187 Tj 30,883 192S .. . 70,809 17,020 0 32,780 3020 ... 07,435 27,055 8 32,05.". 1030* . . 00,321 30.075 8 33,007 ] 931 ... 54.575 4,(i40 — 37.050 1032 .. . 00,080 15.785 5 40,342 1033 ... 00,224 13.281 5 40,52-1 1034 ... 74,255 17.718 5 45,143 1035 ... 80,813 15,837 51 49,500 1930 .. . 84.108 19.374 5J 54,533 *For 14 months. The profit and loss accounts indicate steady progress, and the figures are the highest realised since the boom periods of 1929 and 1930. The financial position may be gauged from the following tables showing the movement in the chief items of the balance-sheet:—

1936 371,G80 05,705 48,133 The above table indicates a steady and persistent improvement in the liquid position, and it would appear that liberal depreciation has been written oft" the fixed assets. It will be noted that in ten years the fixed assets have been written off by over £52,000, plus the substantial additions that have been made to property and plant in the period. Liquid assets represented by stock and book debts are well over £100,000. leaving the margin as against open liabilities of less than £56,000. This leaves a definitely strong position from the point of view of all concerned, namely, the bank, other creditors and shareholders. However, the weak feature of the company's finance has always been its substantial dependence on the bank. This has been recognised by the management in the steady reduction of the item, which may be said to be approaching manageable proportions. A bank overdraft provides a convenient form of financing, but, like call money in any other form, payment-may be demanded at an inconvenient period. At any time in recent years the company could "have easily secured fresh capital with a view to extinguishing this debt, but the directors have not deemed this course advisable.

LIABILITIES. Paid Other liaDate. capita]. Overdraft, bilities. a £ £ 1927 201,095 181,221 45,7SS 1928 201,9!).". 1 OS,502 43,079 1929 201,995 149.875 42,SS9 1930 261,995 197,099 41,120 1931 201.995 195,052 19,990 1932 201.995 150,218 11.915 1933 201,995 194.880 27,143 1934 201.990 118,802 44,800 1935 201,995 114,205 49,510 1930 201,995 90.G10 48,040 ASSETS. Land, buildings Book Date. and plant. Stocks. Debts. £ £ *£ 1927 424,37S G4,S24 37,205 1928 411,511 42.0S1 55,385 1929 415,495 51,373 35,265 1930 421,498 97,812 38,302 1931 414,879 79,348 21,003 1932 408,510 44,902 30,082 1933 405,730 109,359 22,483 1934 392,982 45,847 45,001 1935 383,300 09,301 30,959